SREEDHARAN Vs. FEDERAL BANK LTD

JUDGEMENT

(1.) WHEN C.M.P. 4110/95 came up for orders, I heard counsel appearing on either side in detail. I am disposing of the revision petition.

(2.) PLAINTIFF , decree holder is Federal Bank, Bank advanced money to the defendants-judgment debtors on security of property mortgaged to it. Since the money was not repaid, they obtained the decree. In execution of the decree, mortgaged properties are brought to sale. As per E.P. 74/92, a sum of Rs. 1,54,174.72 is due to the Bank. On the basis of that amount, court fixed reserve price under O.21 R.72A of the Code at Rs.1,60,000/-. The property has not been sold so far. According to judgment debtors, the decree debt as on today will be much more than Rs. 1,60,000/- and so the reserve price requires modification. It is the case of the judgment debtors that the decree holder, mortgagee can be allowed to purchase the property only on wiping off the decree debt. Since this aspect has not been considered by the learned Subordinate Judge, the judgment debtors want this court to interfere with the order dated 17-8-1995.

(3.) CLAUSE (2) of R.72A mandates that in case the mortgagee, decree holder is allowed to purchase the property in court sale, the court has to fix a reserve price. The said reserve price should not be less than the amount due for principal, interest and costs in respect of mortgaged property, unless the court otherwise directs. From this, it is evident that ordinarily the court has to fix the reserve price of the properties at an amount not less than the amount due to the decree holder. The amount so fixed is known as the reserve price. In fixing the reserve price, the court has to take into consideration the entire facts and circumstances of the case and the value of the property. If the value of the property is such that, it will not be sufficient to wipe off the decree debt, the court may for sufficient reason to be stated in the order, fix a reserve price at less than the amount due to the decree holder.